Wisconsin Budget Bill Wouldn’t Be Able to Be Implemented After Friday

Nobody really knows how long the stare-down in Wisconsin will last. The Joint Finance Committee that was supposed to take public testimony on Tuesday is actually still going on, with Democratic members of the assembly listening to everyone who files into the hearing room. So this could be measured in weeks and not days.

However, there is a bend point, as spelled out in this Milwaukee Journal-Sentinel article. It’s easy to forget that the budget repair bill is a budget bill, and not merely a vehicle to strip public employee bargaining rights. What the repair bill should do is fill a $137 million shortfall – 1% of the total budget – for the rest of the fiscal year, which ends in June. One of the bigger solutions to fill that shortfall actually restructures debt and pushes it into the next fiscal year, saving around $100 million. That may not sound like much of a “solution” at all, but coming from California it sounds pretty commonplace. Anyway, there’s kind of a deadline to accomplishing this debt restructure, and it’s fast approaching.

Besides the union bargaining provisions, the bill includes many other elements, including a refinancing of state debt that Walker wants to shore up the state’s finances through the fiscal year that ends June 30. That would push back $165 million in principal payments on the bonds into future years and free up money that could be used to help the state pay two large outstanding bills – one owed to the state of Minnesota and another owed to a fund for medical malpractice victims.

The Legislature’s nonpartisan Legislative Fiscal Bureau said Walker’s bill, as amended by Republicans on the Legislature’s budget committee last week, would leave the state with just $65 million in reserves. So without the money from the refinancing, the state would have a further projected shortfall of roughly $100 million to make up.

To allow time for that refinancing deal to go through, the bill must pass by Friday, according to a memo earlier this month by state Administration Secretary Mike Huebsch. More recently, Huebsch said it may be possible to pull off the bond deal if the bill passes by Saturday, but no later than that.

“If we can’t pass this by then, we lose our window for refinancing in this (fiscal year),” he said.

The article tries to make it sound like Republicans have “leverage” as well, because they’re going to hold a Senate session on non-financial bills (like cabinet appointments for Governor Walker, for example), which they can do with a simple majority. But if those things can pass anyway, I don’t see how much leverage that is. By contrast, Senate Democrats basically hold $100 million in their hands. [cont’d.]

The proposal, written by Sen. Dale Schultz and first floated in the Republican caucus early last week, calls for most collective bargaining rights of public employee unions to be eliminated – per Mr. Walker’s bill – but then reinstated in 2013, said Mr. Schultzs’s chief of staff Todd Allbaugh.

“Dale is committed to find a way to preserve collective bargaining in the future,” said Mr. Allbaugh in a telephone interview.

On Sunday Mr. Walker reiterated his confidence that Republicans would pass their proposal intact.

“We’re willing to take this as long as it takes because in the end we’re doing the right thing for Wisconsin,” Mr. Walker said during an interview with Fox News on Sunday.

Schultz has been a state Senator for 20 years and was endorsed by the state’s largest teacher’s union in his most recent election. This half-measure, with a sunset on the collective bargaining restrictions, has been floating around for a little while. Democrats don’t accept it and want any changes to collective bargaining off the table. The public employee unions have agreed to concessions on pension and health care contributions – the fiscal implications of the budget repair bill. As Sen. Jon Erpenbach said, “If it’s OK to collectively bargain in 2013 why isn’t it OK today?”

So the compromise doesn’t make a lot of sense. But it has been offered. The moderate Republicans are looking for a way out. Democrats, by contrast, are united. And there’s this looming deadline of Friday.

UPDATE: Gov. Walker sent out this statement with three examples of how collective bargaining is a fiscal issue. One concerns what health care plan teachers sign up for, which is mainly an issue of the Governor seemingly wanting to strip the health care choices of workers (if you like what you have, you can keep it!). The next is some gotcha issue about Viagra in Milwaukee, which state courts ruled against a few years later. The third, and the only state issue, is overtime rules for corrections officers. Somehow I’m not convinced that this is such a scourge. The President of the Wisconsin State Senate didn’t do the job on that either today.

Wisconsin Budget Bill Wouldn’t Be Able to Be Implemented After Friday

Nobody really knows how long the stare-down in Wisconsin will last. The Joint Finance Committee that was supposed to take public testimony on Tuesday is actually still going on, with Democratic members of the assembly listening to everyone who files into the hearing room. So this could be measured in weeks and not days.

However, there is a bend point, as spelled out in this Milwaukee Journal-Sentinel article. It’s easy to forget that the budget repair bill is a budget bill, and not merely a vehicle to strip public employee bargaining rights. What the repair bill should do is fill a $137 million shortfall – 1% of the total budget – for the rest of the fiscal year, which ends in June. One of the bigger solutions to fill that shortfall actually restructures debt and pushes it into the next fiscal year, saving around $100 million. That may not sound like much of a “solution” at all, but coming from California it sounds pretty commonplace. Anyway, there’s kind of a deadline to accomplishing this debt restructure, and it’s fast approaching.

Besides the union bargaining provisions, the bill includes many other elements, including a refinancing of state debt that Walker wants to shore up the state’s finances through the fiscal year that ends June 30. That would push back $165 million in principal payments on the bonds into future years and free up money that could be used to help the state pay two large outstanding bills – one owed to the state of Minnesota and another owed to a fund for medical malpractice victims.

The Legislature’s nonpartisan Legislative Fiscal Bureau said Walker’s bill, as amended by Republicans on the Legislature’s budget committee last week, would leave the state with just $65 million in reserves. So without the money from the refinancing, the state would have a further projected shortfall of roughly $100 million to make up.

To allow time for that refinancing deal to go through, the bill must pass by Friday, according to a memo earlier this month by state Administration Secretary Mike Huebsch. More recently, Huebsch said it may be possible to pull off the bond deal if the bill passes by Saturday, but no later than that.

“If we can’t pass this by then, we lose our window for refinancing in this (fiscal year),” he said.

The article tries to make it sound like Republicans have “leverage” as well, because they’re going to hold a Senate session on non-financial bills (like cabinet appointments for Governor Walker, for example), which they can do with a simple majority. But if those things can pass anyway, I don’t see how much leverage that is. By contrast, Senate Democrats basically hold $100 million in their hands.

The proposal, written by Sen. Dale Schultz and first floated in the Republican caucus early last week, calls for most collective bargaining rights of public employee unions to be eliminated – per Mr. Walker’s bill – but then reinstated in 2013, said Mr. Schultzs’s chief of staff Todd Allbaugh.

“Dale is committed to find a way to preserve collective bargaining in the future,” said Mr. Allbaugh in a telephone interview.

On Sunday Mr. Walker reiterated his confidence that Republicans would pass their proposal intact.

“We’re willing to take this as long as it takes because in the end we’re doing the right thing for Wisconsin,” Mr. Walker said during an interview with Fox News on Sunday.

Schultz has been a state Senator for 20 years and was endorsed by the state’s largest teacher’s union in his most recent election. This half-measure, with a sunset on the collective bargaining restrictions, has been floating around for a little while. Democrats don’t accept it and want any changes to collective bargaining off the table. The public employee unions have agreed to concessions on pension and health care contributions – the fiscal implications of the budget repair bill. As Sen. Jon Erpenbach said, “If it’s OK to collectively bargain in 2013 why isn’t it OK today?”

So the compromise doesn’t make a lot of sense. But it has been offered. The moderate Republicans are looking for a way out. Democrats, by contrast, are united. And there’s this looming deadline of Friday.

UPDATE: Gov. Walker sent out this statement with three examples of how collective bargaining is a fiscal issue. One concerns what health care plan teachers sign up for, which is mainly an issue of the Governor seemingly wanting to strip the health care choices of workers (if you like what you have, you can keep it!). The next is some gotcha issue about Viagra in Milwaukee, which state courts ruled against a few years later. The third, and the only state issue, is overtime rules for corrections officers. Somehow I’m not convinced that this is such a scourge. The President of the Wisconsin State Senate didn’t do the job on that either today.